Global financial group, SWIFT, boots Iran banks from network

Laura Rozen

The EnvoyMarch 15, 2012

A major global financial clearinghouse, the Brussels-based SWIFT network, announced Thursday that it is cutting off some two dozen Iranian banks—a move one Iran analyst described as ousting them from the "financial equivalent of the United Nations."

"Cutting Iranian banks off from the financial equivalent of the Union Nations is a meaningful step," Mark Dubowitz, an Iran sanctions expert with the Foundation for Defense of Democracies, told Yahoo News in an interview Thursday.

"It will greatly complicate Iran's ability to move billions of dollars through the global financial system," he said.

The Belgium-based Society for Worldwide Interbank Financial Telecommunication (SWIFT) handles financial transactions among thousands of banks around the world. The decision means it will no longer provide such services to European Union-sanctioned Iranian banks, SWIFT said. The action—affecting roughly 25 Iranian banks—will go into effect on Saturday.

SWIFT''s CEO called the action "unprecedented."

"Disconnecting banks is an extraordinary and unprecedented step for SWIFT," CEO Lázaro Campos said in a statement posted to SWIFT's website.

The action comes as the international community is preparing to resume negotiations with Iran over its nuclear program next month.

Iran's top nuclear negotiator Saeed Jalili wrote European Union foreign policy chief Catherine Ashton this week proposing their deputies meet to arrange the logistical details for resumed talks. Some think the high-stake talks are not likely to resume until after the second round of Iran parliamentary elections, scheduled for April 24-25.

"After years of incremental sanctions, there's no question that the Obama administration has turned the corner to an economic warfare strategy designed to cripple the Iranian economy and try to make [Iranian Supreme Leader] Ali Khamenei cry uncle," Dubowitz said, advocating still tougher measures aimed at destabilizing and further isolating the Iranian regime. "It's a welcome step, but not a silver bullet."